Press Release 2010

Nitto Denko to Boost Optical Films Capacity by 30 Percent

Japan’s leading diversified materials manufacturer and the world’s major optical films maker Nitto Denko Corporation (Nitto Denko) will significantly boost its production capacity of optical films going into liquid crystal displays (LCD), in response to the soaring demand for large-screen LCD-TVs mainly in the newly emerging economies, the company announced today.
More specifically, Nitto Denko plans to raise the production capacity of its LCD-use optical films by some 30% from the current level, to 154 million m2 per year, by investing a total of roughly 20 billion yen over the Fiscal Year 2010 - 2011 period. The company plans to achieve the capacity boost by fundamentally altering the production process to a much higher efficiency level to further improve productivity, in order to continue supplying the world with high-performance and high-quality optical products for which Nitto Denko is so well known.

Background

With the market for large-screen LCD-TVs being expected to continue growing in newly emerging economies such as China, and the demand for such TVs showing a solid uptrend in advanced areas of the world such as the U.S. and Europe as well as Japan, major LCD panel makers have announced aggressive capital expenditure plans under which they are showing vigorous capacity expansion moves.
On its part, Nitto Denko has been striving to reduce costs associated with optical films by pushing ahead with thorough-going production process rationalizations and product yield improvements since 2007, in addition to avoiding large-scale investments, with the aim of converting the optical films segment into a cash cow business from the earlier high-growth model.
While the company intends to firmly maintain this basic stance from now on, it has nevertheless decided to execute the capital investment plans this time, based on the judgment that further productivity improvement is necessary through a drastic process alteration in order to accommodate the worldwide expansion of LCD-TV demand accompanied by increasing screen size